NFA fines FXCM $2MM plus orders refunds to customers - Reviews of Brokers and Data Feeds | futures io social day trading
futures io futures trading


NFA fines FXCM $2MM plus orders refunds to customers
Updated: Views / Replies:4,679 / 13
Created: by Big Mike Attachments:1

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 1  
 
Thread Tools Search this Thread
 

NFA fines FXCM $2MM plus orders refunds to customers

  #11 (permalink)
Elite Member
Honolulu, Hawaii
 
Futures Experience: Intermediate
Platform: NinjaTrader
Broker/Data: ATC/TT, AMP/Zen-Fire, AMP/CQG
Favorite Futures: TF
 
bluemele's Avatar
 
Posts: 2,547 since Jun 2010
Thanks: 3,806 given, 2,826 received


Big Mike View Post
Partners paid restitution as well, did not come out of FXCM's coffers, based on my understanding.

Mike

We are in the wrong business.

Reply With Quote
The following user says Thank You to bluemele for this post:
 
  #12 (permalink)
 Vendor: www.fxcm.com 
New York
 
Futures Experience: Intermediate
Platform: Strategy Trader
 
Jason Rogers's Avatar
 
Posts: 164 since Aug 2010
Thanks: 122 given, 153 received



Hi Mike,

Friday's action from the NFA primarily concerns positive slippage, and I would like to shed more light on how positive slippage with FXCM's NDD forex execution system used to work prior to August 2010 and how it has worked since then.

FXCM’s platforms display the best bid/ask spread streamed from the firm’s liquidity providers plus FXCM’s mark-up. Every FXCM NDD forex trade is automatically offset in a two-step process, designed to ensure that FXCM does not profit from a trader’s losses. In the first step of the execution process, a trader clicks on the price and the order is sent to FXCM. In the second step, FXCM automatically sends the client’s order to one of its liquidity providers to offset the trade.

FXCM’s execution system prior to August 2010 only offered price improvements to clients in the first step of the process. If a better price became available on FXCM’s platform in the fraction of a second after the client submitted the order but before the order was received by FXCM, the client would benefit from the price improvement. However, FXCM’s previous execution system did not provide clients with price improvements in the second step of the execution process, even if FXCM was able to offset the order at a better price, excluding FXCM’s markup. FXCM enhanced the execution system in 2010 so that clients now benefit from price improvements in both steps of a transaction for all order types.

It is important to note: By the end of 2010 FXCM enhanced its execution system to offer price improvements on all trades. You may remember from my forum posts last August that I announced positive slippage for limit and limit entry orders on this thread. All orders now eligible to receive positive slippage, and all price improvements are subject to available liquidity.

The settlement amount and the client price improvement credit will have no negative impact on FXCM's financial balance sheet because several founding partners of FXCM have reimbursed the company for the credit and the fines. As of June 30, 2011, FXCM Inc. had over $200 million in cash and no debt.

FXCM's goal is to have a fair and transparent system, and we are proud to offer an execution system that passes on any price improvements. FXCM has compiled statistics from July 1, 2010 until now to display the percentage of orders positive slipped and negatively slipped, and which orders most frequently experience each. The percentage of orders between positive and negative slippage has been roughly equal.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).




And we have broken this down even further to display the number of orders on a monthly basis positively and negatively slipped:

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


Limit and limit entry orders are the most likely to experience positive slippage which is why we highlight using limit and limit entry orders in the execution center on our website. You can find even more data on slippage broken down per order type in the complete report here: Slippage Statistics

Please let me know if you have any additional questions. I will do my best to answer them as thoroughly as possible.

Jason
FXCM

If you have questions about our services at FXCM please send me a Private Message.

Last edited by Jason Rogers; August 15th, 2011 at 01:35 PM.
Reply With Quote
 
  #13 (permalink)
Elite Member
Honolulu, Hawaii
 
Futures Experience: Intermediate
Platform: NinjaTrader
Broker/Data: ATC/TT, AMP/Zen-Fire, AMP/CQG
Favorite Futures: TF
 
bluemele's Avatar
 
Posts: 2,547 since Jun 2010
Thanks: 3,806 given, 2,826 received


Jason,

The fine is pretty serious and I am sure the NFA spent a long time in producing this fine.

Your reasoning sounds fine as a good 'pitch' on the event, but my question would be, why would they hit you for NOT passing on a transactional benefit to the end player. I don't believe that is within any guidelines that you have to pass any positive slippage when transacting?

I have worked and seen plenty of businesses, and I guess I am a bit hard pressed for a entity that receives a benefit due to timing while holding the asset is now responsible for passing that benefit onto the customer. (unless they are always hit with the negative and never the positive!)

For instance, a mortgage lender (bank in this instance) creates a transaction (mortgage) and then market moves in their favor so they can sell it for more to Fannie Mae, etc. or private entity. Now the government is going to go after them to provide the end customer a capture of the benefit?

hmmmm. Sounds good, but that doesn't sound like the whole story.

Reply With Quote
 
  #14 (permalink)
Fortitudo et Honor
Austin, TX
 
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: Futures
 
Posts: 882 since Mar 2011
Thanks: 128 given, 703 received


bluemele View Post
Jason,

The fine is pretty serious and I am sure the NFA spent a long time in producing this fine.

Your reasoning sounds fine as a good 'pitch' on the event, but my question would be, why would they hit you for NOT passing on a transactional benefit to the end player. I don't believe that is within any guidelines that you have to pass any positive slippage when transacting?

I have worked and seen plenty of businesses, and I guess I am a bit hard pressed for a entity that receives a benefit due to timing while holding the asset is now responsible for passing that benefit onto the customer. (unless they are always hit with the negative and never the positive!)

For instance, a mortgage lender (bank in this instance) creates a transaction (mortgage) and then market moves in their favor so they can sell it for more to Fannie Mae, etc. or private entity. Now the government is going to go after them to provide the end customer a capture of the benefit?

hmmmm. Sounds good, but that doesn't sound like the whole story.

I disagree.

It goes to the element of reasonable expectation and consumer protection.

You can't pass on the negative slippage and then keep the positive slippage to yourself. And unless I'm misreading, that's what was ocurring. They'd pocket the difference when orders were purchased at an advantageous price, but pass along the pain when they couldn't get an even or advantageous price.

Or I guess you could, and simply let the chips fall where they may (with respect to negative consumer sentiment).

As a libertarian and a fan of free markets, I usually abhor regulations and oversight. But in this instance, unless the customers were EXPLICITLY aware that they were to receive only negative slippage, then I think the ruling is fair and just.

Now, if FXCM had up front told it's customers "hey, we're going to make money off your great trading entries, and then we're going to stick it to you on your poor entries....just be aware" then I'd say the monkey is on the dumb customer.

I will agree with you on the overall sentiment though. Seems to me that if FXCM was willing to try to get away with this...why wouldn't they try to get away with other ways to screw their customers.....

The response tells me that it's typical corporate business mentality where the fines and penalties don't outweigh the benefits of screwing someone. (this is how an auto manufacturer justifies not conducting a recall, and killing people, because the negative effects of the recall outweigh the certain lawsuits of a non-recall).

I won't mix threads, but watching the "stop hunting" video with respect to Metatrader platform is enough to keep me away. When a broker has the ability to freeze your charts and manipulate your lag/entry/exit efficiencies, then no thanks.

"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
Reply With Quote
The following user says Thank You to RM99 for this post:

Reply



futures io > > > > NFA fines FXCM $2MM plus orders refunds to customers

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
FXCM Strategy Trader ??? xTrader1 Platforms and Indicators 14 July 24th, 2011 09:48 AM
Gain Capital (Forex.com) fined by NFA for fraud. MetalTrade Currency Futures 9 October 30th, 2010 10:11 AM
Verizon to Refund Millions of Customers for False Charges Quick Summary News and Current Events 0 October 3rd, 2010 07:50 PM
NFA investigates against GAIN Capital / Forex.com Mftkn Reviews of Brokers and Data Feeds 4 July 1st, 2010 07:57 PM


All times are GMT -4. The time now is 04:14 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-15 in 0.10 seconds with 20 queries on phoenix via your IP 54.90.92.204